strategy+business Winter 2013 : Page 11

leading ideas value proposition would have to be overwhelming. Entering markets serving more diverse customers could prove more promising, as there are multiple pos-sible submarkets to enter (or create), and the power of any dominant play-er in a submarket will likely be less than that of a dominant player in a homogeneous single market. It’s much easier, for instance, to provide a new, compelling twist on a dating site than to provide a new search engine. The growth rate of technology-based businesses ensures that plat-forms will become an increasingly prevalent mode of operating in the marketplace, which raises important questions for your business strategy. Are you competing within a plat-form marketplace? Consider all the facets of your business. Even if your core business is not platform-based, supporting elements could be. If and where you are engaged in platform markets, could you be “tipped out” by a stronger player? Are you primed to dominate? Is the market homoge-neous or heterogeneous? Can you define new segments? How do com-petitors stack up? Unless your platform business has a distinct and recognized advan-tage, long-run success is unlikely. But those firms that provide a supe-rior match between users in the most economically efficient fashion can become the sole dominant play-er in their industry, enjoying mo-nopoly-like profits with a dimin-ished threat of competitive entry from others. + Reprint No. 00218 FIND YOURSELF AT THE CENTER OF SOLUTIONS Dylan Minor is an assistant professor of managerial economics and decision sciences at Northwestern University’s Kellogg School of Management. Here is where actionable business knowledge can help you solve immediate challenges. And where gaining practical business skills from a world-class faculty gives you better tools for leading your company. Learn more about Executive Education

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